If you are an investor, you may be looking for some new ideas for investing. You know, maybe add some variety to your rental portfolio. Does this sound like you? Have you considered investing in a mobile home? If so, you may want to consider some of these key points, both good and bad, that can help you determine if a mobile home is a good rental investment for you.
Appreciation. Yes, mobile homes can appreciate – just like any other home. While they may not skyrocket in value, their value could increase if you did your research and made a wise purchase.
Renovations. Unlike some renovations in a traditional home, the typical renovations that are needed on mobile homes tend to be less costly. Therefore, if you find one that needs some work, you can rest easy knowing that you will have to fork out less money than normal.
The ROI. If you want to have a solid portfolio, then you need to make wise investments, right? When it comes to real estate investments, you often need a highly leveraged mortgage position – along with a decent appreciation rate – to walk away with a good ROI. Well, guess what? Mobile homes often give you that great ROI without even worrying about appreciation or leverage.
Cheap Maintenance. When it comes to a mobile home’s electrical, plumbing, and HVAC system, they are much easier to maintain than a traditional home. This is primarily due to their easy access – and that the homes are often smaller.
Length of Tenancy. While it varies from property to property – and landlord to landlord, of course – there does seem to be some agreement that tenants often stay long-term when living in mobile homes. Which is always good news if you are considering this rental investment.
Large Rental Market. Face it, not everyone can afford to live in the downtown lofts or the 5-bedroom, 3.5 bath homes in the burbs. Sure, many can afford them – but there is a huge market of individuals with average to lower-income nearly everywhere you go. Does that mean these individuals would be bad tenants? Not at all. You can still find great quality tenants who have a smaller budget to work with. Just be sure to treat your tenant screening policy the same no matter the income bracket.
Beware of Extra Costs. Now, you’ve heard all these great things about investing in a mobile home. But, with the good, there is always something to damper the mood. Or, in this case, something to be aware of. Some of these costs associated with mobile homes can be very expensive. Here is a list to look out for:
- Skirting cost for the mobile home.
- Utility connection costs.
- Cost to prepare the lot.
- Transporting the mobile home to the lot, if purchased from dealer or elsewhere.
- Permits and moving fees.
- Costs for awnings and/or porches.
- Cost to purchase an HVAC unit.
If you are considering adding some spice to your investment portfolio, don’t discount the benefits of choosing a mobile home. Considering you do your due diligence, you may find yourself with a nice little addition.
